Solved Examples on Business mathematics

Example 1: Profit and Loss Calculation

A shopkeeper buys a laptop for Rs. 30,000 and sells it for Rs. 35,000. Calculate the profit or loss percentage.

Solution:

Cost Price (CP) = Rs. 30,000

Selling Price (SP) = Rs. 35,000

Profit = SP – CP

= Rs. 35,000 – Rs. 30,000

= Rs. 5,000

Profit Percentage = (Profit / CP) × 100

= (Rs. 5,000 / Rs. 30,000) × 100

= 16.67%

Example 2: Discount Calculation

A retailer offers a 20% discount on a pair of shoes worth Rs. 2,000. Calculate the discount amount and the selling price.

Solution:

Cost Price (CP) = Rs. 2,000

Discount Percentage = 20%

Discount Amount = CP × (Discount Percentage / 100)

= Rs. 2,000 × (20 / 100)

= Rs. 400

Selling Price (SP) = CP – Discount Amount

= Rs. 2,000 – Rs. 400

= Rs. 1,600

Example 3: Break-even point calculation

A company sells a product for Rs. 1,000 and incurs a variable cost of Rs. 400 per unit. Calculate the number of units the company needs to sell to break even.

Solution:

Selling Price (SP) = Rs. 1,000

Variable Cost (VC) = Rs. 400

Break-even point (BEP) = Fixed Costs / (SP – VC)

Assuming the fixed costs are Rs. 20,000, the BEP can be calculated as follows:

BEP = Rs. 20,000 / (Rs. 1,000 – Rs. 400)

= Rs. 20,000 / Rs. 600

= 33.33 units

Therefore, the company needs to sell 34 units to break even (since it cannot sell a fraction of a unit).

Business mathematics is a fundamental concept in business and economic affairs, where mathematical methods are used to solve business-related questions. It involves various mathematical concepts like fractions, ratios, equations, and finance. The skill of implementing business mathematics is crucial for economic decisions in the areas of accounting, finance, marketing, and operations. With the help of mathematical tools, companies can manage finances, find raw materials, and perform routine tasks smoothly.

Business math mastery enables a person to meet the requirements of the business world and arrive at the required conclusions based on available data.